An update yesterday from K Koe Isom stated that, “K·Coe Isom, the nation’s leading agricultural accounting and consulting firm, today had a mixed review of the House tax reform legislation and cautioned that the legislation released today could actually raise effective tax rates on many farmers and ranchers.
“‘We applaud Speaker Ryan and Chairman Brady for moving forward with tax reform but encourage them to modify the legislation to make sure it works for agriculture,’ said Jeff Wald, CEO of K·Coe Isom. ‘The eventual phase-out of the estate tax will be welcome news for farms and ranches that would otherwise be subject to this tax. We also applaud the bill for not limiting farmers’ ability to use the cash method of accounting.’
“Wald continued, ‘We are worried, however that provisions in the House tax bill could hamper growth for many farms and ranches and could actually increase the amount of taxes these operations pay. These provisions include the restrictions on interest expense deductions, the curtailment on carry-backs of losses, the elimination of the Domestic Production Activities Deduction (DPAD), and limitations on like-kind exchanges.'”
Yesterday’s update noted that, “Wald called on Congress to modify the tax reform legislation to ensure that it doesn’t hurt America’s farms and ranches. ‘As the House moves forward with tax reform, we would ask that they consider four changes to the bill.’
- Exempt farm businesses from limits on interest deductions.
- Allow farmers and ranchers to use like-kind exchanges for farm equipment.
- Exempt agriculture from the elimination of the Domestic Production Activities Deduction (Sec. 199).
- Allow agriculture to carry-back losses to offset taxes paid in previous good years.
